(Original headline: If Tesla Wants to Go Mainstream in China, It Needs to Cut Prices)
(Photo: Tesla charging point for a shopping mall in Shanghai. As of the end of September this year, Tesla has sold a total of 12,000 cars in China. Now the company is negotiating with the Shanghai government to invest and build factories in Shanghai. The new factory is expected. After completion, the annual production capacity will reach 150,000. Photo: CHANDAN KHANNA/AGENCE FRANCE-PRESSE/GETTY IMAGES)
Netease Technology News October 25 news According to "The Wall Street Journal" reported that as a high-end new energy car brand, Tesla is increasingly popular in China. Recently news of Tesla's negotiation with the Shanghai government to invest in factories in Shanghai has once again reached the newspapers. People cannot help asking whether Tesla's popularity in China is enough to support a factory.
Yale Zhang, managing director of Automotive Foresight, a consulting firm in Shanghai, believes that Tesla has been profitable among high-income buyer groups who are pursuing brand value, but to get into the mainstream mass market, Lower the price."
With the strong demand from the Chinese market for high-end imported vehicles and the rise of electric vehicles, Tesla has finalized a cooperation agreement with Shanghai to establish the company’s first overseas factory so far in the Shanghai Free Trade Zone. Foreign media reported this news over the weekend. Actually as early as June of this year, Tesla issued a statement saying that it was negotiating with the Shanghai government to establish a factory.
Tesla CEO Musk has a powerful star in China. Mainland media often praise him for his insight into the technology industry. The celebrity effect helped Tesla become the only foreign-funded company that entered the Chinese electric vehicle market, and it still did not set up a local stronghold.
Ev-sales website statistics show that in the first nine months of this year, Tesla sold a total of 1.2 imported cars in China, which is higher than the 12,000 in 2016. Tesla’s official did not disclose specific sales figures, but said that in the $7 billion in revenue last year, the Chinese market contributed 1.1 billion, accounting for 15%, which is second only to the US market.
China imposes a tariff of 25% on imported cars, which means that Chinese consumers purchase cars at a much higher cost than American consumers. In China Easycar Online, Tesla's popular model, the Model S, starts at RMB 708,900, which is approximately $106,800. In contrast, the same model in the United States starting price is only 74,500 US dollars.
Ms. Zhou Lixun has an automotive parts company in Beijing. Earlier this year, she spent RMB 1.1 million to buy a Model X for her business partners. “There are other electric car brands available, but all are not high-end. We think Tesla is high-tech, let us feel younger and more fashionable.â€
At present, Tesla is trying to attract a wider range of consumer groups. According to informed sources, the company’s strategy is to become the first foreign automaker to wholly build a factory in China. A wholly-owned establishment does not choose a local partner. On the one hand, it is for the sake of technical secrecy. On the other hand, it can guarantee 100% profit.
The downside of this strategy is that the establishment of a factory in the free trade zone cannot reduce the import tariff by 25%. The Shanghai government did not respond to requests for comment on this matter. The high selling price may be a hindrance to the sales of the new Model 3 models in China. The Model 3 is priced from US$35,000 in the US, and the price in China is still uncertain.
"The potential consumers care about their own money." said Zhang Yu.
Tesla placed control at a higher priority than the selling price. Eventually it may find it difficult to sell enough cars. This would make the construction of a factory in China seem unreasonable. The wave of new energy vehicles is rising in China. Without the burden of import tariffs, a large number of local competitors can provide Bitsila's more people-friendly products.
In addition to Tesla, many other foreign manufacturers also tried to compete in the Chinese market. Last week, Volvo’s high-performance car brand Polestar launched its first model in Shanghai. The new car will be built on the mainland to avoid the switch tax, and Polestar executives say it will directly challenge the Tesla Model 3.
At present, all Tesla cars are produced in the United States, and it takes one month to transport them to China. It takes two weeks after entering the customs to be sent to buyers. Tesla dealers in Chengdu stated that consumers’ demand for Tesla is already very strong and local production is expected to increase sales further. (Sun Wenwen)
Fiber Optic Distribution Box,Fiber Optic Breakout Box,Fibre Optic Breakout Box,Fibre Break Out Box
Cixi Dani Plastic Products Co.,Ltd , https://www.danifiberoptic.com